What exactly is a Public-Private Partnership?
Public-Private Partnerships (P3s) are contracts between government and private-sector partners that use creative approaches to enable the design, building, financing, operation and/or maintenance of facilities that serve the public. Sometimes, City of Ottawa P3s also involve federal and/or provincial government partners. P3 approaches enable the City to offer residents new or better facilities that it could not afford to undertake on its own, or that it does not have the specialized skills to undertake. Learn more about the City of Ottawa’s P3 approach by reading the report entitled “Public-Private Partnerships”, which was approved by City Council on 26 June 2002.
Is there a “right” way of doing a Public-Private Partnership?
There are many types of Public-Private Partnerships. The “right” Public-Private Partnership is the one that best meets the needs of the partners in the local context. One size does not fit all.
How many P3s does the City of Ottawa have underway now?
There are currently nine completed P3s (Superdome East, Bell Sensplex West, Ben Franklin Park Superdome, Richcraft Sensplex East, West Carleton Community Complex, Shenkman Arts Centre, Ottawa Paramedics HQ, Garry J. Armstrong Long-Term Care Centre and the Lansdowne Park redevelopment). The P3 for Ottawa Light Rail is currently underway.
How many more P3s are planned?
New potential P3 projects are being considered every year. As new potential P3 projects are selected, they are submitted to Committee and Council for approval to advance.
How are P3 projects selected?
As new needs arise for public facilities of all types, such as recreational facilities, health care, learning, safety or emergency services facilities, housing and transportation infrastructure, City staff review and prioritize needs and develop a list of potential P3 projects. Each of these projects undergoes an initial assessment of urgency, cost, timeline and other factors, and a short-list of potential P3s is generated and submitted to Committee and Council for action. Once approved, each P3 is then submitted to detailed needs and cost analysis, and once again submitted to Committee and Council for inclusion in budgets and authority to proceed with procurement of a private-sector partner.
How is the private-sector partner selected?
Once approved for advancement by Committee and Council, every P3 project undertakes a competitive bidding process where private-sector companies are invited to qualify and then submit their detailed proposals for the project. The proposals from qualified firms are assessed, and a preferred partner is chosen. Once that partner is selected, final aspects of the agreement structure are worked out and a contract is finalized. Committee and Council review and approve this final contract, after which construction can begin.
How does the City ensure that the private-sector partner is delivering the value promised?
The City of Ottawa closely monitors the progress of each P3 project from beginning to end. Specific aspects of the private-sector’s reporting and monitoring activities are written into each P3 agreement. If there are any concerns by the City that value is not being delivered as promised, the City and the private-sector partner work together to make appropriate adjustments to ensure that value is being delivered to both parties. In addition, the City provides annual status reports to Committee and Council regarding each P3 project to ensure the City is continuing to receive best value.
Where can I learn more about P3s?
There are many online resources that provide information on Public-Private Partnerships, as well as annual conferences such as the Canadian Council for Public-Private Partnerships annual conference held each year.
About Public-Private Partnerships (P3s)
In an increasingly competitive global environment, governments around the world are focusing on new ways to finance projects, build infrastructure and deliver services. Public-Private Partnerships (PPPs or P3s) are becoming a common tool to bring together the strengths of both public and private sectors. In addition to maximizing the efficiencies and innovations of private enterprise, P3s can provide much needed capital to finance government programs and projects, thereby freeing public funds for core economic and social programs.
On June 26, 2002, City Council received a report entitled “Public-Private Partnerships”, and endorsed the concept of using Public-Private Partnerships (P3) as a tool to identify, analyze and implement innovative opportunities for capital project development.
Key Benefits of P3s
Key Benefits of P3s for Residents
- Ability to access new state-of-the-art facilities
- Faster design and construction of new facilities
- Continued access to programming and services
- Projects reflect residents’ priorities
- Helps to stimulate economic growth and employment
- Minimizes impact on resident taxes
- Frees up public funds for other core services
Key Benefits of P3s for the City
- Shares risk and responsibility with private-sector partners
- Addresses key issues such as multiple demands, high expectations and pressure to reduce debts
- Accesses new sources of funds and new specialized skills
- Delivers capital projects (buildings and infrastructure) faster
- Reallocates resources to core areas under government responsibility, thereby improving the use of assets
- Increases efficiency and effectiveness
- Creates high-quality infrastructure
- Promotes transparency, accountability and in-depth cost/benefit analysis and scrutiny of proponents offering the best value
- Allocates risks to the party best equipped to manage them
- Obtains private-sector investment in public-sector infrastructure
- Enhances competitiveness
Key Benefits of P3s for the Private Sector
- Steady revenue streams linked to secure contracts
- New business opportunities
- Potential to build on the expertise of government organizations
- Sharing of risks